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Big Yamal deals coming up, says Novatek

Russia’s second biggest gas company appears to have found a long-awaited credit solution for its Yamal LNG project. According to the company, the financing issue will be up for discussion in the company’s general assembly due 22 April.

«The upcoming general assembly of the company will include approval of a number of transactions and agreements related to external financing of the Yamal LNG project», a press release about the upcoming event says.

It is not yet clear what will be the essence of the deals.

According to newspaper Kommersant, Novatek has for two years sought to attract external financing for the project. Meanwhile, deals have been made with Chinese investors, including with project co-owners CNPC and the Silk Road. The company has also got a 150 billion ruble support package from the Russian National Wealth Fund.

When in full swing, the Yamal LNG plant will have the capacity to produce an annual 16,5 million tons of LNG, all of it extracted at the nearby South Tambey field. The project also includes the development of the Sabetta port, a major infrastructure hub on the eastern shore of the peninsula.

Novatek is Russia’s biggest independent gas producer, partly controlled by structures associated with businessmen Gennady Timchenko and Leonid Mikhelson, two men with close connections with the Kremlin.

The Russian government has from before invested heavily in the Yamal project. More than 47 billion rubles of state money has been invested the Sabetta port and adjacent infrastructure. The project infrastructure also includes the development of a 50 km long sea channel stretching into the peninsula.

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The Sabetta port will be built to handle more than 30 million tons of goods per year. It is to be operational all-year-round, despite the highly complex ice conditions of the Ob Bay.